Cheap (37 page)

Patten’s prescient analysis is even more apt today than it was when he first published it over a hundred years ago. Capitalism has indeed become an abstraction in which financial “instruments” are cleverly crafted to serve the interests of the few while exploiting the weaknesses of the many. No matter where we stand economically a decade or five decades from now, we will not forget the meltdown of the current decade or how we got here. Our fixation on all things cheap led us astray. We have blundered before and risen chastened but stronger. From this latest fiasco we have learned the hard lesson that we cannot grow a country and a future on a steady diet of “great deals.”

Americans love a bargain, and that is not about to change. But sometimes what looks like a bargain is really just a bad loan. The latest economic meltdown gave evidence that a globally integrated world economy is not secure when built on a shaky foundation of “more and more for less and less.” Cheap “no money down” mortgages with low introductory interest rates seemed like a good way for more people to get into the housing market, until the “teaser” rates gave way to higher rates, loan holders defaulted, and thousands of homes went on the block. Buy-now-pay-later schemes sound great until the bill comes due, larded with exorbitant retroactive interest. Cheap flights are enticing, but delays and cancelations cost us plenty, as do the noxious fumes pluming through the crowded sky. “Too cheap to fix” electronics seem less attractive when their life span only briefly exceeds that of their warranty and their broken innards leak heavy metal into our landfills.

“Everyday low prices” are built on everyday crumby lifestyles, not only for Mexican cloth cutters and Thai shrimp farmers and Chinese toy makers but for all of us. There is nothing innovative about building business plans on the backs of an insecure, low-wage workforce, about depleting resources and polluting environments to cut costs, about squeezing producers until they fail or quit or cheat. Shuttling the American middle class out of town on a rail of low prices is not the path to prosperity or growth.

Globalism is our reality and our future, and it brings with it a sober responsibility. Free markets are important—essential—but they are only free if we make them so. We are consumers, certainly, but also citizens of the world whose needs and wants are linked to—and dependent on—the needs and wants of others. Our practice of scouring the world for cheap resources and cheap labor is not sustainable. It is a great relief to know that in a true global village we can love a bargain without compromising our standards or values.

The next consumer revolution will be bloodless, requiring neither bullets nor even bullhorns. We have the power to enact change and to chart a pragmatic course. That power resides not only in the voting booth but in our wallets. Bargain hunting is a national pastime and a pleasure that I, for one, will not relinquish. But knowing that our purchases have consequences, we can begin to enact change. We can set our own standard for quality and stick to it. We can demand to know the true costs of what we buy, and refuse to allow them to be externalized. We can enforce sustainability, minimize disposability, and insist on transparency. We can rekindle our acquaintance with craftsmanship. We can choose to buy or not, choose to bargain or not, and choose to follow our hearts or not, unencumbered by the anxiety that someone somewhere is getting a “better deal.” No longer slaves to the low-price imperative, we are free to make our own choices. As individuals and as a nation we can turn our attention to what matters, secure in the knowledge that what matters has never been and will never be cheap.

This book began as a conversation with my editor, Eamon Dolan, a man with the intellect of an Oxbridge don, the manners of an aristocrat, the VO2 max of a Sherpa, and the work ethic of Bill Gates. Eamon pushed me to expand my thinking beyond what I thought were its natural limits, tightening my focus and forcing me to carefully consider—and reconsider—every assumption. Eamon is the sort of editor all authors dream of but few are lucky enough to know in their waking life.

Among the hundreds of experts and colleagues who helped shape my thinking on this project, a few stand out as being particularly influential. I am deeply grateful for the great generosity of Daniel Ariely, James B. Duke Professor of Behavioral Economics at Duke University; Mark Barenberg, professor of law at Columbia University; Jared Bernstein, chief economic advisor to Vice President Joseph Biden; Robert Bruno, associate professor of labor and industrial relations at the University of Illinois Urbana-Champaign; Peter Cappelli, George W. Taylor Professor of Management at the Wharton School, University of Pennsylvania; Lizabeth Cohen, Howard Mumford Jones Professor of American Studies at Harvard University; Robert Lawrence, Albert L. Williams Professor of International Trade and Investment at Harvard’s Kennedy School; Nelson Lichtenstein, professor of history and director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara; Robert Pollin, professor of economics and founding co-director of the Political Economy Research Institute at the University of Massachusetts, Amherst; and Peter Timmer, visiting professor in the Program of Food Security and the Environment at Stanford’s Woods Institute for the Environment. Others who were kind enough to share their thoughts and insights at some length include Martin Neil Bailey, former Senior Fellow, Institute for International Economics; Emek Basker, assistant professor, Department of Economics, University of Missouri; W. Sushi Chan dra, assistant professor of marketing, Boston University; Sucharita Chandran, assistant professor, Boston University School of Management; Altha Cravey, associate professor of geography, University of North Carolina; Erica Dawson, assistant professor of organizational behavior, Yale School of Management; Pamela Gordon, CEO, and Charlie Bernhardt, analyst, at Technology Forecasters; Lisa Bolton, assistant professor of marketing at the Wharton School, University of Pennsylvania; Dan Claw-son, professor of sociology, University of Massachusetts, Amherst; Nancy Cleeland of the Economic Policy Institute; Sean Cooney, associate professor of law, The University of Melbourne; Matthew Crawford, fellow at the Institute for Advanced Studies in Culture at the University of Virginia; Peter Doeringer, professor of economics, Boston University; Peter Fader, professor of marketing, Wharton School, University of Pennsylvania; Kathryn Fitzgerald of FKF Applied Research; Ellen Frank, senior economic analyst for the Poverty Institute at Rhode Island College; Mary Gallagher, associate professor of political science at the University of Michigan; Julie Guthman, associate professor of sociology, University of California, Santa Cruz; Jacob Hacker, professor of political science and Resident Fellow of the Institution for Social and Policy Studies, Yale University; Gregory Hess, vice president for academic affairs and dean of the faculty, Robert Day School of Economics and Finance, Claremont McKennan College; Ron Hira, assistant professor of public policy, Rochester Institute of Technology; Steven Hoch, Patty and Jay H. Baker Professor, professor of marketing, Wharton School, University of Pennsylvania; Ira Kalish, director of consumer business, Deloitte Research; Brian Knutson, associate professor of psychology and neuroscience, Stanford University; David Laibson, Robert I. Goldman Professor of Economics, Harvard University; Donald Lichtenstein, professor at Leeds School of Business, University of Colorado, Boulder; Richard Locke, Alvin J. Site-man (1948) Professor of Enterpreneurship, professor of political science, Sloan School of Management, Massachusetts Institute of Technology; Sarah Maxwell, associate professor of marketing, Fordham University; Kent Monroe, professor emeritus of business administration at the University of Illinois, Urbana-Champaign; Read Montague, professor of neuroscience, Baylor College of Medicine; Bethany Moreton, assistant professor of history, University of Georgia; Michael Morris, agricultural economist at the World Bank; David Neumark, professor of economics, University of California, Irvine; David Parkes, Gordon McKay Professor of Computer Science, Harvard University; Misha Perovic, assistant professor of sociology, National University of Singapore; Souha Ezzedeer, Assistant Professor of Business, York University; Rama Ramakrishnan, former chief analytics officer and vice president of product development, analytic products, Oracle Retail; Robert Reich, professor of public policy, University of California, Berkeley; Jeff Riedinger, dean, International Studies and Programs, Michigan State University; Pietra Rivoli, professor of finance and international business, McDonough School of Business, Georgetown University; Alan Sanfrey, assistant professor of psychology, University of Arizona; Robert Schindler, professor of marketing, Rutgers School of Business; George Laurie, principle analyst, Forrester Research; Tim Silk, assistant professor of marketing, Sauder School of Business, University of British Columbia; Merritt Roe Smith, Leverett and William Cutten Professor of the History of Technology at the Massachusetts Institute of Technology; Gail Tom, professor of marketing, Sacramento State; Daniel Viederman, executive director, Verite; Joel Waldfogel, chair of business and policy, Wharton School, University of Pennsylvania; Barton Weitz, executive director, David F. Miller Retailing Education and Research Center, University of Florida.

Master craftsmen Brent Hull of Brent Hull Architectural Design in Fort Worth, Texas; Peter Korn, executive director of the Center for Furniture Craftsmanship in Rockport, Maine; and Neil Kaufman, director of the National Center for Craftsmanship in Fort Collins, Colorado, helped set me straight on what it takes to build objects of lasting value, as did Richard Sennett, professor of sociology at both New York University and the London School of Economics, and author of the marvelous book
The Craftsman.
Robert Kanigel, professor of science writing at the Massachusetts Institute of Technology, informed my thinking on the history of technology, as did cultural historian Roz Williams, Robert M. Metcalfe Professor of Writing in the department of Science, Technology and Society at MIT, president of the Society for the History of Technology, and a dear friend whose insights, support, and soulful cooking have sustained me for over two decades.

At Wegmans I am grateful to Jo Natale for making things happen and to Danny Wegman for taking time out of his insane schedule to speak with me at length. I would also like to thank Brien Williams, oral historian and videographer, for rising before dawn on a chilly Sunday morning to tape the “grand opening” of a supermarket, as well as Carol Ruppel for accompanying him and asking the hard questions.

In China I would like to thank the dozens of workers, scientists, and public health professionals kind enough to speak with me off the record, in particular Y.Y. in Taizhou, who asked that his name be forgotten but whose courage I will never forget. As well I would like to thank Dr. Yuan Dong, chief of the unit of Environmental Health, the Shanghai Municipal Center for Disease Control and Prevention; and Wang Chang Chu, assistant editor of
China Business News.
David Barboza, China correspondent for the
New York Times,
was most generous with his thoughts on business as usual in China, which significantly informed my own. I hope someday to repay the generous hospitality of Gail and Colin Lawrence in Shanghai. Thanks to Jamie Shreeve and
National Geographic
magazine for subsidizing the trip to China and to the editors at
Audubon
magazine for their support as well.

In Sweden I owe a serious debt to IKEA spokeswoman Charlotte Lindgren, who served tirelessly as guide, companion, and cultural interpreter, and whose kind offer to join her for a traditional Swedish midwinter sea sauna and ocean dip I never quite declined but now do. In Sedona I want to thank my friends at the Journalism and Women Seminars (JAWS), vortex skeptics and shoppers extraordinaire. In Las Vegas I am grateful to Gillian Naylor, associate professor of marketing at the University of Nevada, Las Vegas, for convincing me that discount outlet stores are a gamble not worth taking and that comparison shopping for higher education is no gamble at all.

At Boston University my deep thanks go to dear friends Susan Blau, Caryl Rivers, and to my old pal and partner in so many things Doug Starr. They also go to my research assistants Rachel Blumenthal, Joe Caputo, Arsineh Aghazani, and the scores of hardworking graduate students who make teaching such a challenge—and a pleasure.

Thanks to the Brain Trust: June Kinoshita, Karen Wright, and Nicole Reindorf, whose faultless and fearless appraisal of all things literary helped keep me on my toes, and to Robin Marantz Henig, Andrew Lawler, and Charles Mann, extraordinary writers, colleagues, and friends who see through it all—but gently. Thanks to my brother Richard, a scholar and athlete whose good sense I will never take for granted, and to my brother David, whose strength stands as a model for us all.

To my agent, Todd Shuster, who dons a velvet glove to play hardball, and whose confidence in my work exceeds my own.

Bill Whitworth, my old editor at
The Atlantic Monthly,
helped sharpen my prose and my thinking, as did my editors there—Corby Kummer, Amy Meeker, Barbara Wallraff, and Toby Lester.

This book owes everything to the patience, support, and wise counsel of my little family. Joanna, my material girl, kept my fashion sense as sensible as anyone could (given the obvious constraints) and kept me laughing. Alison, budding cognitive scientist, dared me to look deeper and to take nothing on its face. Marty, challenging as he is loving, is always there for me every step—and misstep—of the way. Thanks so much, guys.

While I relied chiefly on firsthand reporting and research for this book, I also benefited greatly from the hard work and expertise of others. In the body of the book I credited everyone I quoted directly and mentioned many from whose work or thoughts I gleaned insights. Notable among these was Lizabeth Cohen, whose
A Consumers’ Republic
offers a fine overview and historical analysis of the politics of postwar mass consumption. For China, in addition to my own reporting in Shanghai, I relied on the work of several China hands, among them
China Inc.
by Ted C. Fishman and the fascinating
Oracle Bones
by Peter Hessler. For thoughts on the state of the American worker I was enlightened by
The Big Squeeze
by Steven Greenhouse,
The Disposable American
by Louis Uchitelle,
Behind the Label
by Edna Bonacich and Richard P. Appelbaum, and
The Great Risk Shift
by Jacob S. Hacker. Robert Reich’s
Supercapitalism
was of particular help on the perils of growing income disparity and what he calls “turbo-charged” global capitalism. Robert Pollin’s incisive
Contours of Descent
offered careful documentation and analysis of the decline of the middle class and the real wage in the face of growing productivity under neoliberal restructuring. On all things Wal-Mart there is probably no better guide than Charles Fishman’s
The Wal-Mart Effect,
and no more thorough analysis than that offered by the many authors of
Wal-Mart: The Face of Twenty-First-Century Capitalism
edited by Nelson Lichtenstein. Jason Zweig’s
Your Money and Your Brain
is a nice lay introduction to neuro-economics, and Daniel Levitin’s
This Is Your Brain on Music
is an excellent reference on the physiology of perception. Of course there were scores more books—and hundreds of other thinkers—whose influences this book reflects. I hope that I have managed to credit all of them in the notes that follow.